EXCLUSIVE: I’ve learned that, for the past two weeks, meetings between partners of William Morris and Endeavor agencies have been fraught with tension. The reluctance now to merge isn’t on the WMA side because Jim Wiatt and Dave Wirtschafter are known to be eager for this deal to happen. Rather, it’s from Endeavor’s side because there are fears there’s too much risk and not enough upside. On Thursday, which has been the day both sides have met for weeks now, all the designated partners will confab about the deal’s economics and then decide what the next step is. That’s when the two agencies will either agree to continue negotiating this merger or not. “Thursday is a big day,” a source tells me.

Adding to the problem is that WMA has been obstinate when it comes to the two agencies’ discussions about who should stay and who should go if the two tenpercenteries merge. Emanuel, for instance, has been screaming at Wiatt, and battles have broken out among some of their subordinates. “Wiatt is trying to sell the group on his judgment and his leadership to save his people,” one insider tells me. “Because Jim knows this deal will dismantle his company. So when Ari pushes Jim’s buttons, Wiatt panics and goes on the defensive. ”

My insiders at WMA acknowledge, “Dave and Jim have failed as leaders. Yet they want the last hurrah and to let people think they’re in control. But they’ve got to let Ari lead and get out of his way.”

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The rumors of a William Morris-Endeavor merger had been around for months and months, and I know some phone calls were exchanged after the end of the writers strike a year ago. But the reality is that these deals aren’t done overnight: like everything in Hollywood that involves ego and money, they’re complicated because they combine different agency cultures as well as partners and personnel. (Who else remembers back to 1992 when William Morris acquired Triad? The two agencies had been talking for 17 months; and, even when those chats became very serious, the deal points took five months. And let’s not forget the back story behind the ICM-Broder merger.) But I was the first to report that talks had heated up between upstart Endeavor and venerable William Morris to the point where I was being told by mid-February the odds were “70/30″ that the two agencies would do a deal. Endeavor’s Ari Emanuel has been on the prowl: he even had several meals with ICM’s investor Rizvi Traverse that didn’t go anywhere. But Endeavor-WMA looked to be a great fit: William Morris with a powerhouse music division but also a motion picture talent department needing more marquee names and a flagging television department except for unscripted fare. Endeavor, on the other hand, has been signing marquee names and packaging primetime series galore and would love that music money. One agency is strong where the other is weak. But the problem is what it’s always been: the alpha male owners of major agencies always want to be in charge: Ari Emanuel to run the combined agency as long as Jim Wiatt gets a fancy title and an uber-lucrative contract. Besides, if Wiatt doesn’t make this move now, then WMA will turn into a music agency and he could get sidelined.

One of the first hurdles to overcome was the tax consequences of any deal. It all had to do with “LLC” and “S” corporations, which could have meant writing checks in the millions of dollars to the U.S. government. Also, I found out there was at one point a 3rd company involved as an investor and partner. Then I reported on March 13th that the tax issues had been resolved.

That the deal was proceeding became clearer when I reported that founding partners at Endeavor had been phoning clients to make sure they’d signed their agency contracts. One screenwriter who had been there awhile was surprised that, 2 hours after a partner called, the contract was messengered to the scripter’s office. Then again, that happened right before Broder merged with ICM. And also a few years ago when WMA was in the final stages to merge with United Talent in a deal that never closed.

Both sides now realize that any newly merged company has to consist of only 150 core movie/tv agents at most. The mantra of these negotiations is “make it smaller”. That means, of WMA’s 150 agents, and Endeavor’s 100 agents, about 100 from the combined total will have to be let go. And since CAA’s Richard Lovett has pursued a policy of 100% marketshare when it comes to clients, the new WMA-Endeavor is making as its goal to rep only the elite Top 2%.

The prospect of inevitable consolidation has led to both agencies finding themselves Rumor Central and denying that wholesale layoffs have started when they haven’t. There are persistent whispers of a pre-merger shakeup at WMA involving motion picture talent department head Gaby Morgerman. (I’ve been receiving nonstop complaints about Morgerman from inside WMA for almost a year now.) “It’s one of many conversations about examining our talent department and how to make it work more efficiently. Some of these conversations have included Gaby, yes. We have to make things better,” a WMA insider told me.

Endeavor partner Patrick Whitesell especially has expressed frustration with WMA’s attempt “to pump its chest like crazy” over its talent department even though Hollywood knows it’s been weakened by agent layoffs and client defections. At one recent meeting, WMA agents were boasting about having just signed Sex And The City‘s Kristin Davis. The Endeavor agents were seen rolling their eyes, and Ari and Patrick were overheard saying quietly to the other, “Didn’t we fire her?”

I also hear that the Endeavor side has not tried to hide that its TV agents think WMA’s Aaron Kaplan should be “on top of the list” of people let go as soon as a deal is consummated. Hollywood is well aware that, under Kaplan, the Morris TV department has plummeted in prestige and power and packages, whereas Endeavor is a juggernaut these days. But Wiatt is Kaplan’s mentor, and Jim has been trying to wheedle, and even beg, Endeavor to keep Aaron on board. It’s such a non-starter that even Kaplan knows the ax is about to fall and called up United Talent.

It’s weird, too, that Endeavor has signed two William Morris clients in a row recently (Sean Hayes and Rain Wilson). Usually, when there’s a deal in the works, the two agencies agree not to poach. Then again, I’m told that Jim Wiatt told a WMA staff meeting on March 11th that any merger deal wasn’t happening right away and the tenpercentery should stay focused on its clients.

After another particularly ugly meeting took place recently between the two agencies, a depressed Emanuel started using the phrase, “We all need a bigger boat.”

Repeated battles even have broken out over what to call the new agency. WMA keeps fighting tooth and nail to keep its name atop the merged company, citing its long-standing brand. Endeavor is arguing that brand is moldy oldie. “Morris is trying to hold onto anything to keep their respect and pride,” one source tells me.

There’s no question right now that Endeavor is in the driver’s seat with regard to this deal. “If they decide to walk away, they know William Morris is going to chase them and acquiesce to some of the areas that are in conflict because Morris wants it so badly.” I’ll let you know as soon as I know the next move in this negotiation.

103 Comments

Wowza • on Mar 24, 2009 6:16 pm

Seems like SAG and WMA share the same PR genius.

Ifnotnow • on Mar 24, 2009 6:16 pm

I would hope John Fogelman, Gaby Morgerman, Irv Weintraub and Jennifer Rudolph Walsh are also on the list of those to get the boot, awful people. If Jim and Dave weren’t so vile to people, I would feel sorry for them, this is such a flacid move for them, they have no leverage and no strength.

bob • on Mar 24, 2009 6:16 pm

AARON KAPLAN SUCKS. HORRIBLE. THINKS HE’S THE STAR. NO ONE CAN STAND HIM, AND IF UTA TAKES HIM THEY WILL BE SORRY. HORRIBLY SORRY!

G A • on Mar 24, 2009 6:16 pm

That leaves 100 agents out on the street. Maybe 20 will join new agencies; 80 will leave the business.

I certainly have my top 10 list for whom no tears shall be shed as the door slams on them.

Anonymous • on Mar 24, 2009 6:16 pm

“Wiatt is trying to sell the group on his leadership…”

“Dave and Jim have failed as leaders…”

1. Wiatt does not have any leadership (nor scruples).
2. Dave and Wiatt have failed as leaders.
3. The words Wiatt, Wirtschafter and leaders should never be used in the same sentance, paragraph, document or thesis.
4. The 8 founders are turning over in their grave.
5. What does Norman (who has been bamboozled by Jim, Dave and Irv think?
6. Let’s hope Irv is the third to go…he’s a backstabbing unloyal accountant. And not a very good one at that.
7. See ya Smoller, Button, Cooper, Slater, Morgerman, Kaplan, Ferriter, etc. in the unemployment line. Good luck gettin a gig – you’ll all need it. Given the fact that you lack any skills, and are disliked unanimously in the industry, you’ll certainly need it.

I personally hope that Craig Kestel stays in the merged company. That guy is management material. With his abuse to assistants and his unemployed clients he would be a Beacon for the new Morris Endeavor agency!

brother has a 'digm • on Mar 24, 2009 6:16 pm

i think kaplan is talking to paradigm . they could use him.

one of his clients • on Mar 24, 2009 6:16 pm

Aaron Kaplan has always made me lots of money – That’s all I care about!

“That leaves 100 agents out on the street. Maybe 20 will join new agencies; 80 will leave the business.” Comment by G A

You are forgetting the many, many new boutique agencies & management/production companies that will be started by the, let’s call them “leavers”.

A few will team up but many will go solo.

Then after starving and spending all their money with no cash flow as a start up business 50 percent of those “leavers” will abandon the business after the first year or so of their new “Endeavor”.

Success will depend on how many working actors/writers you represent will go with you to your start-up vs. them seeing themselves as the elite 2% “WMAE” is intent on keeping.

Charlotte A. Cavatica • on Mar 24, 2009 6:16 pm

Great work boys…infighting amongst management and bitching about each other’s agents. Ahem…doesn’t promise to be a happy transition.

For us in the peanut gallery, let’s hope this goes through…agency side has been boring for years…a merger between those two asshole brigades will keep us entertained for months (nay, years) to come.

anonymous • on Mar 24, 2009 6:16 pm

Endeavor in the driver seat? More like back seat driver. Everyone knows who holds the purse strings in this situation.

former agent • on Mar 24, 2009 6:16 pm

Look at Ari’s left hand fingers in picture. His fingers look like the penis he is. Amazing.

anonymous • on Mar 24, 2009 6:16 pm

Kaplan is a damn fine agent (and good looking too)! Every agency on Wilshire would hire him. I call bullshit on this and bet one of the agency competitors is spreading this garbage.

Gerry • on Mar 24, 2009 6:16 pm

Everybody here is talking a good and tough game and everybody here is anonymous. Including me. None of us have the guts to stand up and be accountable for what we say. And that is a shame – because nothing we say means anything.

There are many assistants writing here that were mistreated. There are people who didn’t get jobs with WMA writing here. Everybody has an agenda.

I happen to think Kaplan is a first rate agent. he has made extraordinary deals for people like Kiefer Sutherland, Rod Lurie, and Carlton Cuse. He is a cool thinker.

As for Wiatt and the others at WMA? Well, I have nothing god to say – but because I am using just my ffirst name I’ll shut up.

doug flack • on Mar 24, 2009 6:16 pm

100 fewer parasitic agents in Hollywood — at least it’s a start.

Mike Turlough • on Mar 24, 2009 6:16 pm

Wait, is Ari the femme little ballerina with the cut off finger or is Rahm the loud mouth schmuck that likes to crap on assistant’s desks? i just can’t keep those two straight. One thing is clear though, their parents must have been assholes because they are both pieces of shit. with any luck they’ll both be out of work very soon. parasites!

yy • on Mar 24, 2009 6:16 pm

aaron is a nice guy. people in wma tv are all reasonably nice.

Heywood Jablowme • on Mar 24, 2009 6:16 pm

“Kaplan is a damn fine agent (and good looking too)! Every agency on Wilshire would hire him. I call bullshit on this and bet one of the agency competitors is spreading this garbage.”

Hi Aaron! How’s it going?

big time • on Mar 24, 2009 6:16 pm

If this merger goes through WMA will have won the lotto. They have been around over 100 years, but know they are on their last legs here. They need this infusion of Endeavor blood and without it they could become a thing of the past.

When Endeavor looks at WMA’s books and sees what agents actually bring in from their clients compared to what agents are getting paid the list will be long and deep at WMA of who should be on the chopping block. For starters Jill Smoller, Phillip Button, Brad Slater, Gaby Morgerman, Danny Greenberg, Cliff Roberts and the list goes on and on. However, the most worthless and highest paid employees are Jim Wiatt and John Fogelman. I think John and Jim know this is WMA’s saving grace and if it doesn’t happen they are on the outs. Now guys like Kaplan and Ferriter work hard and actually make the company money so one should think before letting them go. However, both make decent seven figure salaries so that is an issue to discuss.

Ari – please treat this as one of the most important decisions of your professional life. You have built up Endeavor into a powerhouse and relatively quickly. Merging with WMA could be a good thing if done right and it’s well thought out. However, this could be one of the worst mistakes in history too and be written about in the next Mailroom book. Maybe the better plan would be to raid whatever clients WMA has that are worth going after and then you won’t have to pay any extra agents high salaries and you won’t have to deal with Jim Wiatt sinking the ship you built.

Janet • on Mar 24, 2009 6:16 pm

Why doesn’t anyone talk about Cliff Roberts and Danny Greenberg. Those goons are a joke. They hang out in each others office and walk around the hallways thinking they are so busy. The reality is they spend half the day in agents offices like Aaron Kaplan’s playing video games. Now tell me, how well does that service their clients as well as the agency????